South Korea and the future of beauty - 5 questions for Endrik Hasemann
The beauty industry is in upheaval: urbanization, digitalization, a growing awareness of health and the environment are changing the context of our lives, our behavior and, of course, our beliefs and narratives about beauty.
We talked to Endrik Hasemann (Managing Director Beiersdorf Korea) about the Nivea Accelerator "NX" program and the developments in what is probably the most exciting beauty market in the world.
1) For some years now, South Korea has also been increasingly becoming a beauty pioneer in western countries. How would you describe the beauty market there and what is so special about it?
The biggest difference between Korea and other markets is the diversity of brands, products and stores that can be found in Korea. The market is very trend-oriented, very innovative and is characterized by a multitude of small and versatile brands. For example, there are stores that only sell sheet masks and offer over 500 different products, while in Germany there are only a handful of masks. I have never seen a market in the world where there is so much competition in the beauty sector. Areas such as plastic surgery and laser therapy are also very strong here.
Historically, beauty has played an important role in Korea for centuries to attract social attention. The seasons also play an important role: Due to the strong temperature fluctuations in the country, many people want to protect their skin from these environmental influences.
2) Korea is now the third largest beauty exporter in the world after the USA and France. How do you explain the global hype surrounding Korean beauty products?
The products are very innovative and of high quality. I think everyone who visits Korea is surprised by the variety - Korea has become a kind of global beauty Mecca. Korea is very popular with the young target group in particular. Topics like K-Pop, K-Drama and K-Beauty are becoming more and more popular. This is also seen by the government: these important export goods have been strategically promoted for years, thus creating a very large industry. This year, the government has made several billion dollars available for the promotion of start-ups. This benefits the large number of beauty start-ups in Korea, which in turn focus strongly on the export of K-Beauty products.
3) The "NX - NIVEA ACCELERATOR" is an innovation program for the next generation of beauty startups in Seoul. What are the latest developments that have led to this program?
The beauty industry is in a state of upheaval. As a result of digitalization and new technologies, new business models are emerging and market entry barriers for new providers are falling. Today's consumers expect significantly more variety including personalized products - so the range of beauty products on offer is constantly increasing.
Startups play an important role here, as they are able to react very quickly to new trends. These include influencers who can market their own beauty products directly to millions of consumers through their social channels such as Youtube, Instagram and co. The marketing of the small brands focuses strongly on online channels. In order not to lose touch with consumer needs, retailers such as Douglas or dm drugstore also focus much more on small brands.
I assume that the beauty market will continue to grow through new offers, new business models and technologies. Startups are one of the main driving forces. This is a great opportunity for us to work more closely with the startups, form partnerships, joint projects and new business models. Our NIVEA Accelerator provides the platform for exchange as well as the opportunity to bind young beauty startups to us as long-term partners.
4) Why is South Korea's start-up culture particularly suitable for the Accelerator Program?
South Korea has a unique ecosystem of start-ups, beauty industry and technology. In addition, Korean beauty products are very trend-oriented. There are over 30,000 startups with a strong focus on skin care. In addition to the startups, an excellent supplier network of beauty products has established itself. This network enables the start-ups to set up new beauty brands – and products in small initial quantities within a few months, which in turn further promotes the innovative strength of the start-ups.
Korea is also one of the technologically most developed countries. Many startup founders come from companies like LG and Samsung and now focus on beauty tech. This intersection of beauty focus and tech focus is unique and makes the market highly relevant to our NIVEA Accelerator.
5) How does the Accelerator Program work and what are your goals?
We have rated 200 companies from South Korea and selected five of them. The selection was based on business potential, the company's ability to innovate and the founding team. In addition, the topics that interest us, such as personalization, digitalization or beauty tech, should be addressed. The five companies that we finally selected play very well in these areas. They are now part of the "NX - NIVEA Accelerator", which we set up with the co-working company WeWork. We want to work with these start-ups for a year. What is particularly important to us here is to establish long-term partnerships and exploit cooperation potential. For example, we give the teams access to our global experts from research and development, the supply chain or help them set up distribution in new markets. In this way, we support the young companies in their efforts to internationalize. The start-ups in turn can help us to generate new consumer trends and insights or to develop new product lines and new digital business models.
Author: Wiebke Ebehardt
As a New Business and Marketing Strategist, Wiebke is in charge of the Changing Culture Magazine. She passionately devotes herself to the idea that the powerful tool of marketing will be used in the future to positively influence preferable behavior and change life for the better.